Discover How Home Battery Storage Can Save You Money and Help the Environment

If you’re considering climate-friendly practices for your home, rooftop solar panels may come to mind. However, compact home batteries offer a cost-effective alternative to save both money and the environment.

While solar energy continues to grow, battery storage is rapidly emerging as the fastest-growing power technology globally. The International Energy Agency reports that home batteries not only power homes but also allow homeowners to sell excess energy back to the grid. Although many homeowners combine these batteries with rooftop solar, increasing energy prices are prompting a rise in the standalone battery market.

In numerous countries, new home batteries can be used by simply plugging them into an electrical outlet—eliminating the need for professional installation.

“This could be a game changer,” says Ian Staffell from Imperial College London. “Low-cost, plug-and-play batteries could rival rooftop solar.”

Last year, over 40,000 homes and small businesses in the UK installed battery storage systems, with and without solar, nearly doubling the previous year’s record. After energy supply disruptions caused by the Iran war, installations by Octopus Energy surged from February to March, remaining stable above pre-war levels despite a national cap on energy prices imposed by the UK’s energy regulator.

In the United States, despite a slowdown in rooftop solar growth, home battery installations are projected to reach 75% by 2025. The technology is also expanding rapidly in China, Australia, and Germany, where one in six homeowners owns a battery, totaling over 2 million units.

Variable tariffs allow homeowners to charge batteries during low-cost hours, such as in the early afternoon or overnight, at rates as low as 5 pence per kilowatt-hour in the UK. During peak demand hours from 4 PM to 7 PM, the cost can jump to 40 pence or higher, especially during heatwaves when energy consumption rises.

The average UK homeowner spends around £9,400 on battery systems, but Octopus plans to introduce a plug-in option costing less than £300. This compact unit, roughly shoebox-sized, can store 2 kilowatt-hours—enough to keep a refrigerator running for a day or two. If approved for consumer use by 2027, renters can also benefit from this technology.

“You can expect a return on investment within two to three years,” says Phil Steele of Octopus. “It’s straightforward.”

Home batteries contribute to reduced greenhouse gas emissions by decreasing peak energy demand, which in turn reduces the need for utilities to depend on gas-fueled energy sources. On windy or sunny days with low demand, the UK’s electricity grid can temporarily run on nearly 100% carbon-free resources. Storing energy in home batteries can mitigate the environmental impact more effectively than wasting excess energy generated by home solar panels.

Last year in England, £379 million were spent to shut down wind farms when the electricity grid couldn’t accommodate the generated energy; however, this surplus could have been stored in batteries. If half of the UK’s homes had 5kWh of battery storage, the government’s 2030 target for energy capacity expansion could be achieved, as outlined in the battery storage framework.

As solar and wind power increasingly contribute to the energy mix, home battery storage will play a crucial role in balancing the grid and enhancing climate benefits, according to Staffel.

“Currently, solar power might be preferable, but in five years, batteries will play a much larger role,” he adds.

Nonetheless, the manufacturing of batteries may offset some climate benefits. Aritra Ghosh from the University of Exeter points out that there is currently no infrastructure in place to recycle millions of end-of-life home batteries, which Octopus estimates will take a minimum of 12 years to establish.

A recent study indicates that producing lithium-ion batteries results in approximately 150 to 200 kilograms of carbon dioxide emissions per kilowatt-hour of capacity—similar to driving a gasoline vehicle for a kilometer. Decarbonizing heavy industry in regions like China could significantly lower this impact, but as Ghosh emphasizes, “we’re not close to achieving that yet.”